Sensex back at 19000 on FII buying

Putting the controversial participatory note (P-note) issue to rest, key stock indices on Friday soared to new highs on fresh buying by foreign institutional investors (FII) on robust corporate second quarter earnings led by construction and engineering major Larsen & Toubro.

The Bombay Stock Exchange's 30-share index, Sensex, rallied 472.28 points or 2.52 per cent,ending the day at 19243 points, a new record for the index.

The previous highest close was 19058 (October 15), a day before the Securities and Exchange Board of India (Sebi) put out the proposals to curb P-note issuances.

The broader S&P CNX Nifty closed at 5702.95 points, up 133.35 points or 2.41 per cent.

Cues from other Asian markets were also positive as they seemed to be insulated from record crude prices, bad corporate results and negative employment data in the US. Hong Kong's Hang Seng was up 1.84 per cent, Jakarta Composite rose 1.07 per cent and Japan's Nikkei 225 ended higher by 1.36 per cent.

Market participants say that robust buying from FIIs has led to the market gaining 9.5 per cent this week, the best week in six and half years.

Local insurance companies were booking profits in banking stocks ahead of the credit policy on October 30 since they had bought heavily into those stocks during last week's downturn.

The Sensex is up 23 per cent since the US Federal Reserve cut interest rates on September 18. It has hit a record high in 20 of the 27 sessions since the rate cut.

"Today, there was some short covering in the market from hedge funds which had short positions. Apart from that, there was also some buying from institutional investors that spurred the market to new highs," said Ambareesh Baliga of Karvy Stock Broking.

Larsen and Toubro was up 12.16 per cent to Rs 3,876.80 a share after stellar results.